NYC pied-à-terre tax blocked by judge; Wynn, Ross join legal challenge

A state Supreme Court judge on Staten Island ruled against New York City's implementation of its pied-à-terre tax on September 29, 2026, finding the rollout deeply flawed and ordering the city to restart the process. Judge Wayne Ozzi determined that the city improperly shifted the burden onto homeowners to prove their primary residence, rather than requiring the city to make that determination. The ruling could delay the tax's implementation through the end of 2026, though city officials announced plans to appeal and seek a stay of the injunction to continue collecting the surcharge.

The pied-à-terre tax, promoted by Mayor Zohran Mamdani as a way to close the city's budget gap and "tax the rich," applies annual surcharges to secondary residential properties valued above $5 million (single-, two-, and three-family homes) or $1 million (condos and co-ops). The tax is projected to generate $500 million annually for the city. The lawsuit challenging the rollout was filed on behalf of homeowners and a New York City co-op, represented by attorney Randy Mastro. The initial rollout sent 17,000 notices to property owners before being halted by the court.

New opposition emerged when casino mogul Steve Wynn and former Trump administration Commerce Secretary Wilbur Ross filed a separate lawsuit on Monday against the state, arguing the tax is unconstitutional because it discriminates against people who do not primarily reside in New York State. Both men are Florida residents with significant New York City properties; Ross faces a potential bill exceeding $83,000 for his Manhattan co-op, while Wynn could owe over $183,000 for his city residence. Their legal filing also contends that pied-à-terre owners already pay substantial property taxes and contribute significantly to the city's charitable and cultural institutions.

The Real Estate Board of New York praised Tuesday's court decision, stating that the city's rollout "failed to provide basic procedural protections for homeowners." Mayor Mamdani's spokesperson Matt Rauschenbach responded that the decision was "wrong" and announced the city would appeal. "With a stay, we will continue implementing the surcharge fairly, efficiently and in full compliance with the law, as we have since day one," Rauschenbach said. Governor Kathy Hochul's office dismissed the Wynn-Ross challenge, with a statement suggesting their lawsuit actually strengthens the case for the tax.

The tax has faced multiple legal obstacles since implementation began. The earlier homeowner lawsuit focused on procedural flaws in how the city identified and notified taxpayers, while the Wynn-Ross case challenges the tax's constitutional validity. Legal experts indicated that further challenges are anticipated as the disputes move through the appeals process.